Ledger CEO Pascal Gauthier said: May 22nd Wallet keys saved via Ledger Recover could be exposed in the event of government sanctions.
A subpoena could reveal the user’s seed
Ledger’s new Recover program allows users’ wallet seeds to be “shared” and stored by three different parties. The cryptocurrency community recently raised concerns that shard owners could reveal users’ seeds or directly control users’ wallets through this feature.
Gauthier refuted this concern on his podcast, What Bitcoin Did, stating:
“The only real concern is what if the government issues a subpoena?” [that says they] I want to [us] to retrieve 3 shards. ”
Gauthier suggested that governments usually issue subpoenas only for rare cases related to terrorism, drugs and other criminal offences.
He said the average individual is not subpoenaed every day, and argued that collusion between shard owners is unlikely in 99% of all cases.
CEO talks about subpoena scenario
Despite Gautier’s assurances, other participants in the podcast said the Internal Revenue Service (IRS) had previously submitted subpoenas to Coinbase to obtain customer data, so the government could issue subpoenas. suggested it may be for tax reasons. In fact, the IRS has issued subpoenas to several cryptocurrency companies, including Kraken and Circle, seeking user information.
Gauthier said Coinbase offers banking services, not leisure. He argued that Ledger had no information of interest to the IRS.
Other participants in the podcast said that Ledger extended public key (x-pubs), to view user activity. While this may be of interest to tax authorities, this feature exists separately from his Ledger’s new Seed Recovery feature.
Gauthier also reiterated that Ledger Recover is an option. He said users can use Ledger’s other storage methods if they are unfamiliar with the feature.
Post-Ledger CEO said “sharded” recovery seeds could be disclosed in a subpoena that first appeared on CryptoSlate.